(Add oil settlement prices)
* ADP data initially drives Wall St rally
* Wall St rally fizzles after Fed minutes released
* Most Fed policymakers see change to balance sheet policy
* Dollar index turns lower, yen rises
* Oil hits one-month high near $55 a barrel, pares gains
By Herbert Lash
NEW YORK, April 5 U.S. stocks turned negative
and the dollar slipped on Wednesday after minutes from the
Federal Reserve showed planned changes in its bond investment
policy, reversing a rally spurred by a strong jobs report
earlier in the day.
Most Fed policy-makers think the central bank should take
steps to begin trimming its $4.5 trillion balance sheet later
this year as long as U.S. economic data holds up, minutes on
"A little bit of the optimism has ebbed out of the market,"
said Chris Zaccarelli, chief investment officer at Cornerstone
Financial Partners in Huntersville, North Carolina.
Wall Street turned negative after the minutes from the Fed's
policy-setting meeting of March 14-15.
An earlier stocks rally was driven by a report from payrolls
processor ADP, which showed the most workers were added in March
since December 2014, pointing to further tightening of the labor
"It may be a bit negative for equities and that's put in a
bid for Treasuries," said Alex Manzara, vice president at R.J.
O'Brien and Associates in Chicago.
The Dow Jones Industrial Average fell 41.02 points,
or 0.2 percent, to 20,648.22, the S&P 500 lost 7.25
points, or 0.31 percent, to 2,352.91 and the Nasdaq Composite
dropped 34.13 points, or 0.58 percent, to 5,864.48.
MSCI's gauge of stocks across the globe shed
European stocks rose on the ADP report but pared gains to
close flat. The pan-European FTSEurofirst 300 index
fell 0.01 percent to close at a provisional 1,497.68, while the
STOXX Europe 600 Index, a broad mix of companies from
17 regional countries, rose 0.02 percent.
The U.S. dollar index, which had gained after the ADP
labor report, turned lower and was last down 0.1 percent.
Oil prices rose on an outage at the largest UK North Sea oil
field, but gains were tempered by a surprise increase in U.S.
crude inventories to a record high.
Prices rose early and then seesawed after the U.S.
government reported a weekly rise in crude inventories
of 1.6 million barrels.
Analysts had expected a decrease of 435,000 barrels, and the
build reported by the Energy Information Administration came as
a double surprise after an industry group had reported a draw.
U.S. crude rose 12 cents to settle at $51.15 a
barrel while Brent settled up 19 cents at $54.53.
The ADP data came ahead of the Labor Department's monthly
non-farm payrolls report on Friday, which includes both public
and private-sector employment. Economists polled by Reuters
expect the report to show U.S. employers added 180,000 jobs in
Benchmark 10-year notes last rose 4/32 in price
to yield 2.3354 percent, down from 2.35 percent late Tuesday.
(Reporting by Herbert Lash; Editing by Richard Chang and Nick